The Consideration and Regulation of Climate Change Effects under the Resource Management Act 1991 - Sarah Baillie
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The Consideration and Regulation of
Climate Change Effects under the
Resource Management Act 1991
Sarah Baillie
A dissertation submitted in partial fulfilment of the degree of Bachelor of
Laws (Honours) at the University of Otago, Dunedin
October 2012
1Acknowledgements
___________________________________________________________________________
I would like to thank –
Ceri Warnock, for your enthusiasm, encouragement, helpful direction and willingness
to supervise me at very late notice;
Nicola Wheen, for your valuable comments and for alerting me to instructive cases;
My parents, for supporting me and my endeavours wholeheartedly;
Lucie Greenwood, for providing wonderful company and delicious snacks during our
many hours at the law library;
Andrew Jacombs, for sharing with me your expertise in typographic beauty;
My friends and allies in Generation Zero, for your commitment to taking on the
biggest challenge of our generation with optimism, energy, creativity and cheekiness.
2The Consideration and Regulation of Climate Change
Effects under the Resource Management Act 1991
Sarah Baillie
___________________________________________________________________________
TABLE OF CONTENTS
Introduction ............................................................................................................................ 1
Chapter I: The Global Response to Climate Change.................................................................3
i. Background: the scientific basis for climate change ..............................................................3
ii. Climate change is a ‘super-wicked’ problem .......................................................................5
iii. The current situation and anticipated effects .....................................................................6
iv. Fossil fuels are the main drivers of climate change .............................................................7
v. International action and agreements on climate change ......................................................8
vi. Emissions reduction commitments under the Kyoto Protocol ..........................................10
vii. New Zealand’s commitments under the Kyoto Protocol .................................................12
viii. Significant progress is yet to be made .............................................................................13
Chapter II: Climate Change Law in New Zealand...................................................................14
i. The Climate Change Response Act 2002 ...........................................................................14
ii. The New Zealand Emissions Trading Scheme ..................................................................16
iii. The Resource Management Act 1991 ..............................................................................18
iv: The Resource Management (Energy and Climate Change) Amendment Act 2004 ...........19
v. The Greenpeace cases and the meaning of section 104E ...................................................20
vi. Consideration of climate change effects under section 104(1)(a): Buller Coal ..................22
Chapter III: The Consideration of Climate Change Effects under the RMA............................27
i. Sustainable management and integrated management .......................................................28
ii. Effects and section 104(1)(a) ............................................................................................32
iii. Actual and potential effects .............................................................................................33
iv. Climate change is a cumulative effect ...............................................................................34
v. Climate change is a consequential effect of granting consent for coal mines: A critique of
Buller Coal............................................................................................................................35
vi. The “environment” and jurisdiction over extra-terrestrial effects ....................................39
vii. The Resource Management (Energy and Climate Change) Amendment Act 2004 ..........43
viii. Consistency with international obligations ....................................................................46
Chapter IV: Regulation of Climate Change Effects through the RMA.....................................48
i. Conditions on resource consents.......................................................................................48
3ii. Regulation under both the RMA and the ETS...................................................................49
iii. Validity of conditions.......................................................................................................51
iv. Previous consideration of climate change conditions in New Zealand..............................52
v. Outcomes of attaching climate change effect conditions to resource consents....................53
vi. National Environmental Standards on local government consideration of climate
change...................................................................................................................................54
Conclusion .............................................................................................................................57
Bibliography ...........................................................................................................................59
4INTRODUCTION
___________________________________________________________________________
This dissertation focuses on the consideration of climate change effects by consent authorities
when assessing land use resource consent applications under the Resource Management Act
1991 (“RMA”). Considering climate change effects at the time of application for an activity is
essential for two reasons. First, if the climate change effects of an activity are considered, the
consent authority may refuse consent to an applicant because of these negative effects.
Preventing a greenhouse gas emitting activity from proceeding is the most effective way to
avoid the adverse climate change effects of the activity. Second, in the case of a lot of coal
mined in New Zealand, the RMA will be the only regulation under which those effects are
considered. This is because a lot of New Zealand coal is exported to countries who do not
have climate change mitigation policies in place, and the emissions are not considered under
any other New Zealand climate change law. If the future greenhouse gas emissions of an
activity are not considered under the RMA, they may never be considered or accounted for.
Currently, consent authorities are not authorised to consider climate change effects when
assessing land use resource consent applications, pursuant to the High Court decision in Royal
Forest and Bird Protection Society of New Zealand Inc v Buller Coal Ltd.1 This is despite there
being no prohibition on doing so in the RMA. While the RMA prohibits consideration of the
effects of greenhouse gas emissions on climate change in some specific circumstances, there is
no such express prohibition when considering applications for land use consents. Contrary to
what the High Court has said, this dissertation will argue that it is consistent with the purpose
and scheme of the RMA, New Zealand’s wider climate change framework and New Zealand’s
international obligations to consider future climate change effects under planning legislation.
Chapter one of this dissertation provides context to the issue of climate change, presenting
scientific facts about climate change, and New Zealand’s legal obligations under international
agreements, the United Nations Framework Convention on Climate Change, and the Kyoto
Protocol to the Convention. Chapter two outlines the legal framework that has been
established in New Zealand in order to fulfil these obligations. It also looks at the scope of the
RMA in regulating climate change effects, and key cases which define this scope.
Chapter three focuses on the consideration of climate change effects under section 104(1)(a) of
the RMA in the context of applications for land use consents. It critiques Justice Whata’s
1 Royal Forest and Bird Protection Society of New Zealand Inc v Buller Coal Ltd [2012] NZHC 2156.
1decision in Royal Forest and Bird Protection Society of New Zealand Inc v Buller Coal Ltd
and provides a case for why climate change effects should be considered by consent authorities
when assessing applications for land use consents. Chapter four goes on to discuss the
limitations of only regulating climate change effects through section 104(1)(a), and looks at
how conditions and national environmental standards can further regulate climate change
effects through the RMA.
This dissertation concludes that it is legitimate, and in fact necessary, to consider the climate
change effects of an activity when assessing a land use resource consent application under the
RMA. While the 2004 Amendment Act excludes climate change considerations in certain
circumstances under the RMA, the consideration of such effects when assessing land use,
subdivision and water permits is unaffected. Refusing to consider climate change effects when
they are not expressly prohibited from consideration is at odds with the fundamental purpose
of the Resource Management Act, and undermines New Zealand’s international commitment
to “taking the lead” in reducing greenhouse gas emissions and adopting national climate
change mitigation policies.2
The author believes that climate change is one of the the most important and urgent issues
facing the world, especially young people, and that it is the responsibility of the government to
take strong action to reduce New Zealand’s greenhouse gas emissions. This includes taking
responsibility for greenhouse gas emissions from coal mined in New Zealand and exported
overseas. This dissertation should be read with the above biases and assumptions in mind.
2 United Nations Framework Convention on Climate Change (opened for signature 4 June 1992, entered
into force on 21 March 1994), Art 4(2)(a).
2CHAPTER ONE
The Global Response to Climate Change
___________________________________________________________________________
This chapter will discuss the scientific facts of climate change, and the strong imperative these
facts provide for reducing greenhouse gas (“GHG”) emissions. It will explain the relevance of
coal production and export to climate change, and the importance of reducing fossil fuel
consumption and production. It will go on to set out the key details of the international
agreements which have been established to facilitate global action on climate change, and New
Zealand’s legal obligations in respect of those agreements.
I. BACKGROUND: THE SCIENTIFIC BASIS FOR CLIMATE CHANGE
Climate change is the most significant environmental issue of the twenty-first century, and the
most threatening to the interests of present and future generations. It is a problem on a global
scale, leading to impacts which are not confined to the “environment” in isolation, but also
affect the economy, health, food supply, water, and even the very existence of some island
states.3 Climate change is already affecting ecosystems, freshwater supplies, and human health
around the world.4 Although a certain degree of climate change is now inevitable and has
already taken place,5 much worse impacts can be avoided by substantially reducing the
emissions of heat-trapping GHGs into the atmosphere.
Climate change is caused by the “greenhouse effect” which occurs when heat from the sun,
instead of being reflected back into space, is trapped inside GHGs (such as carbon dioxide and
methane), warming the atmosphere. The greenhouse effect is a natural phenomenon, and vital
to maintaining a life-supporting temperature on earth, however, it is being intensified by
human activities. The ever-increasing amount of GHGs in the atmosphere, the result of human
activities such as burning fossils fuels, deforestation and livestock agriculture, is creating an
energy imbalance, where more energy from the sun is being absorbed than is being emitted
3 Pacific Islands such as Kiribati are extremely vulnerable to the effects of climate change, which
threatens their livelihood, security and the future of their islands’ existence above water. See Office of
the President, Government of Kiribati “Climate Change in Kiribati” (2010) .
4 IPCC “Climate Change 2007: Synthesis Report” (2007) at 33.
5 “Warming of the climate system is unequivocal, as is now evident from observations of increases in
global average air and ocean temperatures, widespread melting of snow and ice and rising global average
sea level.” IPCC “Climate Change 2007 – The Physical Science Basis” (2007) , p 30.
3back into space.6 In the past there has been natural variability in climate and levels of GHGs,
however, natural variability alone cannot answer for the current levels of GHGs.7 The
concentration of GHGs in the atmosphere is now higher than it has been in 650,000 years, and
is rapidly rising.8
As the concentration of CO2 in the atmosphere has increased, so has the average surface temperature of
the Earth. The relationship between atmospheric CO2 concentration and surface temperature is shown
here for the past 130 years. (Image: C2ES)9
6NASA “Scientists Confirm Earth’s Energy is Out of Balance” (2005) .
7 IPCC “Climate Change 2007: Synthesis Report”, above n 4 at 41.
8 Ministry for the Environment “Key facts about climate change” (2010) .
9Center for Energy and Climate Solutions “Atmospheric Carbon Dioxide and Global Surface
Temperature Trends” .
4The Intergovernmental Panel on Climate Change10 found in their Fourth Assessment Report
that “most of the observed increase in global average temperatures since the mid-20th century
is very likely due to the observed increase in anthropogenic GHG concentrations.”11 They also
state that “discernible human influences extend beyond average temperature to other aspects of
climate.”12 Dr. James Hansen explains the connection of human influence to climate change in
more certain terms:
Humanity is now the dominant force driving changes of Earth's atmospheric composition and
thus future climate on the planet. Carbon dioxide emitted in burning of fossil fuels is, according
to best available science, the main cause of global warming in the past century.13
II. CLIMATE CHANGE IS A ‘ SUPER-WICKED’ PROBLEM
Climate change is a difficult issue to deal with, or as some say, a “super-wicked” problem,14
especially due to the fact that the effects of climate change are not geographically connected to
its causes. GHG emissions all around the world contribute to a global change in the climate, as
emissions are quickly dispersed throughout the atmosphere. This means that there is a
disconnect between those creating the problem, and those experiencing the effects of the
problem. For example, Pacific Island states have contributed negligibly to the global increase in
10“The Intergovernmental Panel on Climate Change (IPCC) was set up jointly by the World
Meteorological Organization and the United Nations Environment Programme to provide an
authoritative international statement of scientific understanding of climate change. The IPCC’s periodic
assessments of the causes, impacts and possible response strategies to climate change are the most
comprehensive and up-to-date reports available on the subject, and form the standard reference for all
concerned with climate change in academia, government and industry worldwide.” IPCC “Climate
Change 2007: Synthesis Report” (2007) .
11
IPCC “Climate Change 2007: Synthesis Report Summary for Policy Makers” (2007) at 5.
12 Ibid at 6: The IPCC report finds that human influences have: “very likely contributed to sea level rise
during the latter half of the 20th century; likely contributed to changes in wind patterns, affecting extra-
tropical storm tracks and temperature patterns; likely increased temperatures of extreme hot nights, cold
nights and cold days; and more likely than not increased risk of heat waves, area affected by drought
since the 1970s and frequency of heavy precipitation events.”
13James Hansen et. al “The Case for Young People and Nature: A Path to a Healthy, Natural,
Prosperous Future” (2011) , at 1.
14 Jonathan Boston “A New Global Climate Change Treaty – Can Humanity Deliver? Our Challenge
after Durban for 2015” (paper presented at Otago University, Dunedin, 14 March 2012), at 4:
“[Climate change] can be classified as a ‘super-wicked’ policy problem. A super-wicked problem has
the following characteristics: the policy is complex and controversial, with competing problem
definitions; all the available solutions are problematic; delay is costly; those most responsible for the
problem have the least incentive to help solve it; and the central control or enforcement mechanisms
are weak.”
5GHG emissions, yet are on the frontline of climate change effects. There is also an
intergenerational aspect to this issue – those who are causing climate change may not be alive
to experience the worst impacts, while future generations and the young people of today will
bear the costs. These issues of intergenerational justice and justice within the international
community are moral imperatives for action, especially on the part of those nations who are
responsible for large scale GHG emissions.
III. THE CURRENT SITUATION AND ANTICIPATED EFFECTS
The current reality is that even if we immediately make drastic reductions in global GHG
emissions, it is already too late to fully reverse the effects of climate change, which are already
becoming apparent. Sea-level rise caused by melting land-based ice and the thermal expansion
of oceans is already severely affecting island states such as Kiribati,15 and the average global
temperature is steadily rising. 16 Extreme temperature events such as the 2003 heat wave in
Europe that killed more than 50,000 people, and the 2011 drought in Texas that caused more
than $5 billion in damage,17 are becoming much more frequent and more intense worldwide.18
In 2009, the international community “recognised”, in the non-binding Copenhagen Accord,
"the scientific view that the increase in global temperature should be below 2 degrees Celsius"
in order to avoid dangerous climate change. 19 The Earth’s climate has warmed by nearly 0.8
degrees Celsius over the past century, which already has caused more damage than many
scientists expected.20 Given those impacts, the target of two degree falls short of what many
scientists say is required to avoid disastrous effects.21 Prominent climate scientist James Hansen
15Office of the President, Government of Kiribati “Climate Change in Kiribati” (2010)
.
16Susan Solomon et al, eds, Climate Change 2007: The Physical Science Basis. Contribution of Working
Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (New
York: Cambridge University Press, 2007) at 36.
17Aaron Smith “Wildfires and drought cost Texas millions” CNN Money (online ed, New York,
September 8, 2011).
18James Hansen, Makiko Sato and Reto Ruedy “Perception of climate change” (2012) 109(37) PNAS
E2415.
19 Copenhagen Accord, FCCC/CP/2009/11/Add.1 (2009), para. 1.
20 Above n 16 at 36. Examples of the impacts so far include: A third of summer sea ice in the Arctic is
gone, the oceans are 30 percent more acidic, and the atmosphere over the oceans is a shocking five
percent wetter, increasing the probability of devastating floods.
21James Hansen (NASA), Kerry Emanuel (MIT), Thomas Lovejoy (World Bank). See: Bill McKibben
“Global Warming's Terrifying New Math”, Rolling Stone Magazine, July 19 2012
.
6believes that "the target that has been talked about in international negotiations for two
degrees of warming is actually a prescription for long-term disaster."22
The target cap of a 2 degrees Celsius increase in temperature is predicted to lead to, among
other effects:23
• 15 – 40% of species facing extinction and a high risk of extinction of Arctic species,
including polar bears;
• Potential for the Greenland ice sheet to begin melting irreversibly, accelerating sea
level rise and committing the world to an eventual 7m sea level rise;
• A potential 20-30% decrease in water availability in some vulnerable regions
• Sharp declines in crop yield in tropical regions;
• 40–60 million more people exposed to malaria in Africa;
• Up to 10 million more people affected by coastal flooding each year.
These anticipated effects exemplify the urgency of climate change, especially given that the
global community has agreed that a temperature rise of up to 2º celsius is acceptable.
IV. FOSSIL FUELS ARE THE MAIN DRIVERS OF CLIMATE CHANGE
The recent increase in the concentration of carbon dioxide in the atmosphere is largely the
result of the burning of fossil fuels since the industrial revolution.24 In fact, the burning of coal,
oil, and natural gas accounts for about 80 percent of anthropogenic CO2 emissions. 25 Coal is a
major source of GHGs, in 2009 producing 43% of global fuel-source CO2 emissions.26 It also
has the highest carbon content of all fossil fuels, which means that it releases more CO2 when
combusted.27 Current projections by the International Energy Agency (IEA), predict that four-
fifths of the energy-related CO2 emissions permissible by 2035 (if we are to limit temperature
rise to 2ºc) are already "locked-in" by the world’s existing energy infrastructure.28 This means
22 Ibid.
23 Nicholas Stern Stern Review: The Economics of Climate Change (HM Treasury, 2006) at 57.
24Center for Climate and Energy Studies “Climate Change 101: Science and Impacts” (January 2011)
at 3.
25 Ibid. at 3.
26 International Energy Agency “2011 Key World Energy Statistics” (2011) at 44.
27Kevin A Baumert, Tim Herzog, Jonathan Pershing. “Navigating the Numbers: Greenhouse Gas Data
and International Climate Policy” (December, 2005) World Resources Institute at 26.
28International Energy Agency “2011 Key World Energy Outlook Executive Summary” (2011)
at 2.
7that out of the 2,795 gigatons of known coal and oil reserves of fossil fuel companies, it is only
safe to burn 565 gigatons and have a “reasonable chance” of staying under the 2 degree
warming threshold. 29 In order to keep the average global temperature increase at or below 2º
Celsius, coal consumption must peak well before 2020, then decline. 30 The current trend shows
that if the world continues with “business as usual” practices, there will eventually be a
temperature increase of around six degrees.31
Despite the demonstrable need to reduce global fossil fuel use, New Zealand is continuing to
consume, import and export coal, as well as investigate untapped fossil fuel reserves and
develop new coal mines. Currently, mining companies including Solid Energy and Bathurst
Resources, are pursuing developments around the South Island: lignite in Southland, and coal
mines on Stockton Plateau, as well as in the conservation land of the Denniston Plateau.32
These mines are mostly producing coal for export.33 New Zealand coal is exported mainly to
India and Japan, with smaller quantities going to Chile, South Africa, Brazil, China and the
USA.34 2.1 million tonnes of bituminous coal, all from the West Coast, was exported in
2011.35 2.8 million tonnes of coal was consumed domestically during the same period.36 New
Zealand has estimated coal reserves of over 50 billions tonnes.37
V. INTERNATIONAL ACTION AND AGREEMENTS ON CLIMATE CHANGE
While humans have been increasing fossil fuel consumption since the industrial revolution, it
was not clear that there was a correlation between GHG levels in the atmosphere and the
alteration of the global climate system until 1896 when Swedish scientist Svente Arrhenius
made a finding that doubling the carbon dioxide content of the air would gradually raise global
temperatures by 5 to 6 degrees Celcius. It was not until the the late 1950s and 1960s, however,
29 Bill McKibben, above n 21.
30 International Energy Agency, above n 28 at 5.
31 MichelRose “Global CO2 emissions hit record in 2011 led by China - IEA” Reuters (Paris, May 24,
2012). “The trend is perfectly in line with a temperature increase of 6 degrees Celsius (by 2100), which
would have devastating consequences for the planet," Fatih Birol, IEA's chief economist told Reuters.”
32The proposed coal mines on Stockton and Denniston Plateau were the subject of legal challenge in
Royal Forest and Bird Protection Society of New Zealand Inc v Buller Coal Ltd [2012] NZHC 2156.
33 Royal Forest and Bird Protection Society of New Zealand Inc v Buller Coal Ltd above n 1 at [6].
34Energy Information and Modelling Group New Zealand Energy Data File (prepared for the Ministry
of Economic Development 2012) at 36.
35 Ibid.
36 Ibid, at 37.
37 Ibid, at 33.
8that the prospect of climate change became an international concern and was taken seriously
by the scientific community.38 Despite this knowledge and concern, the international
community was slow to respond, and the issue of climate change first appeared in an
international forum at the first World Climate Conference in 1979. Almost a decade later, in
1988, the Intergovernmental Panel on Climate Change (“IPCC”) was set up to assess and
investigate scientific information on the effects of climate change.39 The UN General Assembly
established the Intergovernmental Negotiating Committee for a Framework Convention on
Climate Change in 1990, mandated to negotiate this convention in time for the United Nations
Conference on Environment and Development in Rio de Janeiro in June 1992. International
commitment to confronting climate change and reducing emissions was affirmed at this
conference, when the United Nations Framework Convention on Climate Change (UNFCCC)
opened for signature.40 The UNFCCC was signed by 154 states and the European Community.
New Zealand signed the UNFCCC in June 1992 and ratified it on 16 September 1993. The
UNFCCC came into force on 21 March 1994.
The UNFCCC creates a broad framework for international cooperation to address climate
change and achieve GHG emissions reductions. The objective of the UNFCCC is to:
achieve … stabilization of greenhouse gas concentrations in the atmosphere at a level that would
prevent dangerous anthropogenic interference with the climate system. Such a level should be
achieved within a timeframe sufficient to allow ecosystems to adapt naturally to climate change
… and to enable economic development to proceed in a sustainable manner.41
The UNFCCC provided an impetus for international cooperation on climate change
mitigation. However, it became clear quite quickly that the broad, voluntary commitments did
not provide enough of an impetus for serious GHG emissions reductions.42 Thus, the Kyoto
Protocol (KP) to the UNFCCC was developed to provide legally binding emissions reduction
38
For an interesting account of the history of human understanding of climate change, see Stephen
Harding, “The long road to enlightenment” The Guardian (United Kingdom, 8 January 2007).
39The IPCC was set up by the World Meteorological Organisation and the United Nations Environment
Programme, see above n 10.
40United Nations Framework Convention on Climate Change (opened for signature 4 June 1992,
entered into force 21 March 1994).
41 UNFCCC, art 2.
42New Zealand Climate Change Programme Kyoto Protocol: Ensuring our Future (Ministry for the
Environment, 2001) at 9: “In 1995, at the First Conference of the Parties to the FCCC (COP1), the
parties/signatories concluded that the voluntary reductions proposed by the FCCC might not be
sufficient to successfully address greenhouse gas emissions, and that legally binding targets may be
required.”
9targets for developed countries – to give some “teeth” to the UNFCCC.43 The KP has been
ratified by 191 countries, including New Zealand.44
One of the main features of the UNFCCC and the KP is the principle of “common but
differentiated responsibilities” for developed and developing nations.45 The principle rests on
the rationale that it would be unfair to impose the same obligations on all countries, given that
developing countries have less capacity to reduce emissions, and rely on GHG emitting
technologies to further develop their economies. Further, industrialised nations are responsible
for the majority of GHG emissions historically. “Developed nations” such as New Zealand are
listed in Annex I of the UNFCCC, and are subject to more stringent obligations than non-
Annex I parties.46
VI. EMISSIONS REDUCTION COMMITMENTS UNDER THE KYOTO PROTOCOL
The key section of the KP is article 3.1, which requires Annex I parties to:
... ensure that their aggregate anthropogenic carbon dioxide equivalent emissions of the
greenhouse gases listed in Annex A47 do not exceed their assigned amounts, calculated pursuant
to their quantified emission limitation and reduction commitments inscribed in Annex B ... with
a view to reducing their overall emissions of such gases by at least 5 per cent below 1990 levels
in the commitment period 2008 to 2012.
Annex B of the KP sets legally binding “quantified emission limitations or reduction
commitments” for Annex I Parties. The KP uses consumption-based rather than production-
based emissions accounting; this means that reduction commitments are calculated based on
domestic emissions, and do not include emissions from products (e.g fossil fuels) which are
exported. Parties must meet the reduction targets themselves, or else take responsibility for
their excess emissions by offsetting them through emissions reductions made elsewhere in the
43 Kyoto Protocol to the United Nations Framework Convention on Climate Change (opened for
signature 16 March 1998, entered into force 16 February 2005).
44Of the “developed countries” listed in Annex B of the KP, only the United States has not ratified the
Protocol. Canada withdrew from the KP on 12 December 2011, becoming the first nation to do so:
“Canada pulls out of Kyoto Protocol” The Guardian (United Kingdom, 13 December 2011).
45See UNFCCC preamble; art 3; art 4; art 12. This principle is also reflected substantively in the division
of parties into “Annex I” and “non-Annex I” groupings, with differential commitments regarding
mitigation measures and reporting financing.
46The list of countries covered by Annex I of the UNFCCC is identical to Annex B of the Kyoto
Protocol, with the exception of Belarus which is not included in Annex B.
47GHGs listed in Annex A are: carbon dioxide (C02), methane (CH4), nitrous oxide (N20),
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).
10world, via one of the “flexibility mechanisms” provided in the KP. These include international
emissions trading, partaking in the clean development mechanism, or joint implementation
schemes.48
Most Annex I Parties have committed to reducing their GHG emissions to a specified
percentage below the base level of 1990 emissions over the commitment period 2008–2012.49
New Zealand has committed to ensuring that New Zealand’s emissions between 2008-2012
are no higher than New Zealand’s 1990 level of emissions (or taking responsibility for any
shortfall), a target less demanding than the average agreed for Annex I countries, which is a 5.2
per cent cut on 1990 levels. An agreement for emission reduction commitments that applies
beyond 2012 has not been settled yet.
In addition to emissions reductions obligations, Annex I parties have also agreed to cooperate
in promoting the development of “environmentally sound technologies” and to “take all
practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access
to” such technology, in particular to developing countries.50
Non-Annex I countries do not have any binding emission reduction commitments, but are
encouraged to reduce emissions and are subject to other responsibilities under the UNFCCC
and the KP. A concerning issue which has arisen as a consequence of differentiated
responsibilities for developed and developing nations is “carbon leakage”. Carbon leakage
occurs where the reduction of GHG emissions in one country results in increased emissions in
another, usually with no reduction obligations.51 Therefore, while coal use may be declining in
Annex I states as emissions-reduction policies make it more expensive to consume, producers
in those Annex I states are not reducing production, but are rather exporting the coal to be
consumed elsewhere. In New Zealand, coal mine owners are liable to pay under the Emissions
Trading Scheme for coal that stays in New Zealand, but are not required to pay for exported
coal. 52 This means that there is an incentive for producers to export the coal in order to avoid
48I will not be addressing the details of flexibility mechanisms as they are outside of the scope of this
dissertation. However, for a detailed explanation, see chapter 6, Yamin and Depledge The International
Climate Change regime: A guide to Rules, Institutions and Procedures (Cambridge University Press,
Cambridge, 2004), at 136-196.
49 Kyoto Protocol, Art. 3.1.
50 Kyoto Protocol, Art. 10(c).
51The carbon leakage rate is defined as the ratio of total increased CO2 emissions by the non-Annex B
countries to total emissions abatement by the Annex B country: Sergey V. Paltsev "The Kyoto
Agreement: Regional and Sectoral Contributions to the Carbon Leakage" (Discussion Papers in
Economics Working Paper No. 00-5 , July 2000) .
52 Climate Change (Stationary Energy and Industrial Processes) Regulations 2009, s 11.
11being charged for the emissions. Coal from New Zealand is often exported to non-Annex I
countries.53 In this situation, because the developed countries are not accountable for emissions
from exports, and neither are developing countries, there is no incentive to reduce fossil fuel
exports.
VII. NEW ZEALAND’S COMMITMENTS UNDER THE KYOTO PROTOCOL
Although New Zealand only produces around 0.2 per cent of global CO2-equivalent emissions,
per capita emissions are relatively high compared with other Annex I countries, and it is a
significant historic emitter of GHGs on a per capita basis.54 Projections of New Zealand’s net
emissions over the KP commitment period indicate that New Zealand is likely to meet our
commitments, and in fact, finish with a surplus of Kyoto Units.55 However, this is not
necessarily because New Zealand has reduced its emissions, but because the government can
rely on forestry carbon sinks to restore the balance to 1990 level emissions, as carbon removal
by sinks is included in calculating the net emissions of a country under the KP.56
Under the KP, New Zealand also committed to:
• Make “demonstrable progress” toward achieving commitments by 2005;
• Put in place a national system for estimating GHG emissions and carbon uptakes by
sinks by the end of 2006;
• Establish a register to record and track changes to New Zealand’s assigned amount of
emission units under the KP;
• Engage in international co-operation in relation to policies and measures, technology
transfer, scientific and technical research, and education training;
• Provide assistance through financial resources and funding to help developing
countries to implement their existing commitments;57
• Comply with any future negotiated agreements to further reduce emissions.
53New Zealand Energy Data File above n 34 at 36. “New Zealand coal is exported mainly to India and
Japan, with smaller quantities going to Chile, South Africa, Brazil, China, USA and Australia.”
54Jonathan Boston “The Nature of the Problem and the Implications for New Zealand” Alastair
Cameron (ed) Climate Change Law and Policy in New Zealand (LexisNexis, Wellington, 2011) 87, at
100.
55Kyoto Units are technically called Assigned Amount Units and each represents an allowance to emit
greenhouse gases comprising one metric tonne of CO2 equivalents.
56Kyoto Protocol Art 3(3). See Ministry for the Environment “New Zealand’s net position under the
Kyoto Protocol” 16 August 2012 .
57 Kyoto Protocol, Art 11; UNFCCC Art 4(3), Art 11.
12VIII. SIGNIFICANT PROGRESS IS YET TO BE MADE
Professor Jonathan Boston has noted that “developing a comprehensive, fair and effective
solution to the problem of human-induced climate change is one of the most formidable
challenges currently facing the international community.”58 There is still debate about whether
the UNFCCC and the KP have been effective in achieving any significant reduction in
worldwide emissions, especially in light of the escalating emissions of developing countries. In
2009, gross GHG emissions had increased in most Annex I states, and only the European
Union had achieved anything close to the required reductions, with a decrease of 9.3% from
the 1990 emissions level during the period 1990-2007.59 However, these increases pale in
comparison to the huge growth in emissions from developing countries – China (120.5%),
India (79.9%) and Brazil (54.7%).60
While New Zealand’s GHG emissions are a very small proportion of global emissions, the
government has taken on binding legal obligations to mitigate the effects of climate change.
However, New Zealand mines are exporting large amounts of coal to non-Annex I countries,
which undermines this commitment. New Zealand mining companies are encouraging more
global fossil fuel consumption, contributing to increased global emissions and not being held
accountable. As is evident from worldwide emissions statistics, it is in developing countries that
a big concern lies, and it is to some of these countries that New Zealand is exporting coal. For
this reason, it is important that the inevitable combustion of fossil fuels such as coal and the
associated GHG emissions are considered from their point of origin in New Zealand, otherwise
they may not be considered at all. This point will be considered in more depth in chapter three
of this dissertation.
New Zealand has incorporated its international climate change obligations into domestic
legislation largely through the Climate Change Response Act 2002, associated regulations, and
to a certain extent the RMA. Chapter two will look at New Zealand’s legal framework for
fulfilling commitments under the UNFCCC, the KP and reducing net GHG emissions.
58Jonathan Boston “The nature of the Problem and the Implications for New Zealand” Alastair
Cameron (ed) Climate Change Law and Policy in New Zealand (LexisNexis, Wellington, 2011) 87, at
88.
59Between the period 1990–2007, emissions rose by 30% in Australia, 17% in the US and 8% in Japan.
Ministry for the Environment “New Zealand’s 2020 Emissions Target” (July 2009) . More
recent statistics on worldwide GHG emissions are difficult to find, however, it is expected that more
updated statistics on states’ progress in emissions reduction will be available at the end of the First
Kyoto Commitment period, the end of 2012.
60Ministry
for the Environment “New Zealand’s 2020 Emissions Target” (July 2009)
13CHAPTER TWO
Climate Change Law in New Zealand
___________________________________________________________________________
This chapter outlines New Zealand’s legal response to climate change and the regulatory
framework that has been developed to enable New Zealand to reduce GHG emissions. It
discusses issues relating to the scope of the Resource Management Act 1991 (“RMA”) in
regulating climate change effects, and key cases which have come before the Courts in relation
to these issues. In addition, it identifies weaknesses in the framework, namely, that climate
change effects of activities are not considered in the resource consent application process, and
that certain sources of GHG emissions caused by New Zealand activities not accounted for
under the current scheme. This chapter also begins to consider the question of whether the
scope of the RMA extends to taking account of future GHG emissions from land use activities
when considering resource consent applications.
I. THE CLIMATE CHANGE RESPONSE ACT 2002
GHG emissions in New Zealand are primarily regulated through the Climate Change Response
Act 2002 (CCRA) and associated regulations.61 This legislation is partially supplemented by
the RMA, which plays a limited role in climate change regulation, through provision for
adaptation measures and taking account of the benefits of renewable energy in terms of GHG
reductions. Whether the RMA allows consideration of future climate change effects of an
activity under certain resource consent applications is a point of contention (which will be
further discussed later in this chapter).
From New Zealand’s signing of the UNFCCC in 1992 at the Rio conference up to the present
day, there have been many “visions and revisions”62 of New Zealand climate policy and
legislation. While preliminary discussions on climate change regulation began after New
61Ministry for the Environment “Climate Change Regulations” (1 April 2011) Climate Change
Information .
62 T.S Eliot “Prufrock and Other Observations” Poems (A.A. Knopf, New York, 1920).
14Zealand became a party to the UNFCCC,63 the real debate did not begin until the Kyoto
Protocol was concluded in 1997 and New Zealand ratified it in December 2002.
The CCRA was enacted one month prior to New Zealand’s ratification of the Kyoto Protocol.
Importantly, it established a registry to handle and transfer holdings of assigned amount units
– internationally tradable carbon credits issued under the KP – and enabled the Minister of
Finance to trade those units on the international carbon market. This was key to achieving the
stated purpose of the Act, which was to:
...enable New Zealand to meet its international obligations under the [UNFCCC] and the
[Kyoto] Protocol, including, but not limited to —
(a) its obligation under Article 3.1 of the Protocol to retire units equal to the number of
metric tonnes of carbon dioxide equivalent of human-induced greenhouse gases emitted
from the sources listed in Annex A of the Protocol in New Zealand in the commitment
period; and
(b) its obligation to report to the Conference of the Parties via the Secretariat under
Article 7 of the Protocol and Article 12 of the Convention.64
The Act left it open as to the specific means New Zealand would employ to meet these
obligations. After the CCRA was passed, both an emissions trading scheme and carbon tax
were considered by the government as viable options for fulfilling New Zealand’s international
obligations, and eventually the decision was made to go ahead with an Emissions Trading
Scheme (“ETS”). A working group was formed in 2007, tasked with designing an ETS for New
Zealand, and a bill was introduced into Parliament in November 2007 to enact the New
Zealand ETS65 , receiving royal assent on 25 September 2008.
63See Peter Wilson “The Economics of Emissions Trading” Climate Change Law and Policy in New
Zealand, Alastair Cameron (ed) (LexisNexis: Wellington, 2011), 127, at 154; Climate Change: The New
Zealand Response, New Zealand’s First National Communication under the Framework Convention on
Climate Change (September 1994) FCCC/NC/2 at 33.
64Note: the purpose has been amended four times, the key amendments taking effect on 26 September
2008, pursuant to the Climate Change Response (Emissions Trading) Amendment Act 2008) and on 8
December 2009, pursuant to the National Government’s Climate Change Response (Moderated
Emissions Trading) Amendment Act 2009. The updated purpose of the CCRA (s3), to reflect the
enactment of the ETS, is to:
(a) enable New Zealand to meet its international obligations under the Convention and the
Protocol ...
(b) provide for the implementation, operation, and administration of a GHG emissions trading
scheme in New Zealand that supports and encourages global efforts to reduce GHG emissions by
assisting New Zealand to meet its international obligations under the Convention and the Protocol,
and by reducing New Zealand's net emissions below business-as-usual levels.
65 Climate Change Response (Emissions Trading) Amendment Bill 2007.
15The CCRA contains the central elements of New Zealand’s climate change policy framework.
It set up the structure for issuing, trading and retiring domestic carbon credits by and on behalf
of the Crown, the basis for a national inventory agency to measure and account for emissions
and sinks, and the primary mechanisms of the New Zealand ETS. The CCRA also sets up the
regulatory framework for the calculation of emissions from key industrial sectors, and for the
calculation of GHG removal activities.
II. THE NEW ZEALAND EMISSIONS TRADING SCHEME
The ETS in its original form was short-lived, as the Fifth Labour Government who created the
ETS and passed it into legislation was replaced by a National-led government less than two
months later after a general election.66 The National government quickly established a Select
Committee to review the ETS and in 2009 it was modified, returning in a diluted form.67 Due
to a number of faults, the ETS in its current state does not provide strong incentives for New
Zealand industry to substantially reduce emissions, and rather protects the economic interests
of New Zealand’s largest GHG emitters.68 However, for the purposes of this dissertation it is
not necessary to delve into its nuances and inefficacies, only its general operation.69
The New Zealand ETS was designed pursuant to obligations under the UNFCCC and the
Kyoto Protocol, namely, to introduce domestic policies to reduce emissions. The ETS is a
market-based scheme through which, in theory, the costs of GHG emissions are internalised,
with the “cost” of the emissions falling on participants in the scheme, New Zealand’s major
emitters.70 Emitters are required to pay for their emissions through “surrendering” carbon
credits (“NZUs” – either bought from or gifted by the government), whereas participants who
reduce emissions (e.g through forestry) earn NZUs from the government. Participants can trade
66 The National Party won the general election on 8 November 2008.
67 By the Climate Change Response (Moderated Emissions Trading) Amendment Act 2009.
68Geoff Bertram and Simon Terry The Carbon Challenge: Response, Responsibility and the Emissions
Trading Scheme (Wellington, Bridget Williams Books, 2010), at iii.
69Stated simply – the ETS creates a far from perfect carbon market, especially given the exclusion of
New Zealand’s largest GHG emitter, the agricultural sector, until January 2015, the lack of a cap on
emissions, the transitional provision whereby participants must surrender only one NZU for every two
tonnes of CO2-equivalent emissions, instead of one NZU for one tonne, the free allocation of units to
some participants, and the ‘intensity based’ approach for certain participants.
70 Currently, participants in the ETS are the industries of: pre-1990 forestry, post-1989 forestry,
transport (liquid fossil fuels), stationary energy, emission-intensive industrial processes that are not
trade-exposed, trade-exposed emission-intensive industrial processes. Agriculture participants are
required to begin surrendering units in 2015. A proposed amendment to the ETS currently in the House
will see the indefinite suspension of obligations for agriculture.
16NZUs in the carbon market, where those who reduce emissions profit, and those who create
emissions pay.
The rationale behind the ETS is to reduce GHG emissions through providing economic
incentives. Prior to the ETS, emissions were negative externalities; emitters were not required
to pay for the effects of their activities, leaving society to face the costs. The historical
treatment of large GHG emitters has been criticised in these terms:
Among businesses, the fossil-fuel industry is allowed to dump its main waste, carbon dioxide,
for free. Nobody else gets that break – if you own a restaurant, you have to pay someone to cart
away your trash, since piling it in the street would breed rats.71
Putting a price on emissions is in essence making GHG emitters pay for their own trash. This
trash has been piling up in the street for years, causing a worldwide rat infestation. The rat
infestation still exists, but the ETS ensures that some participants, to an extent, must now pay
for their trash to be removed so that they do not exacerbate the rat infestation further. This
trash will be removed by other participants in the scheme (e.g forestry), who will be rewarded
for this in the form of carbon credits which can in turn, be traded in exchange for cash.
Participation in the NZETS is determined in relation to activities. An individual, company or
entity is, or may become, a participant if they are conducting any of the activities listed in
schedule 3 or 4 of the CCRA. These include activities relating to forestry, liquid fossil fuels,
stationary energy (coal, natural gas), industrial processes, agriculture and waste. Activities have
been phased in over a period of time, and some activities, namely agriculture and waste,
although included in the schedules are not yet required to participate. Participants in the ETS
include both emitters and those carrying out “removal” activities.
It is important to note that the ETS covers only emissions created within New Zealand. So
while fossil fuel activities are covered under the ETS, only emissions from fossil fuels consumed
in New Zealand and the byproducts of extraction are subject to the ETS. Future emissions
from fossil fuels mined in New Zealand and exported overseas are not accounted for.72
Currently, such emissions are not accounted for anywhere in New Zealand’s climate change
framework.
71 Bill McKibben, above n 21.
72 Climate Change (Stationary Energy and Industrial Processes) Regulations 2009, s 11. Coal, which
is exported by the miner is deducted when carrying out the calculation of emissions for which the miner
is liable for under the ETS.
17III. THE RESOURCE MANAGEMENT ACT 1991
The RMA is New Zealand’s primary environmental management and planning legislation. The
purpose of the RMA is to promote the sustainable management of natural and physical
resources. Sustainable management is the underlying thread of the Act, and is defined in Part II,
section 5 of the Act.73
The purpose of sustainable management is supplemented by the rest of Part II, which sets out
various considerations decision makers need to take into account when assessing whether an
activity will achieve the purpose of sustainable management. Decisions makers are required to
“recognise and provide for” specified matters of national importance, 74 have particular regard
to certain “other matters”, including the effects of climate change and the benefits of renewable
energy,75 and take into account the principles of the Treaty of Waitangi.76 Part II provides the
foundation upon which the Act is built, the fundamental importance of which was stated by
Randerson J in Auckland City Council v John Woolley Trust:
Part 2 is the engine room of the RMA and is intended to infuse the approach to its
interpretation and implementation throughout, except where Part 2 is clearly excluded or
limited in application by other specific provisions of the RMA.77
The RMA has been used in the context of climate change regulation in a limited way. In 2004,
the Resource Management (Energy and Climate Change) Amendment Act 2004 explicitly
incorporated climate change considerations into the RMA, at the same time putting limitations
on how climate change can be considered under the Act. Prior to the 2004 amendment,
decision makers saw the RMA as a tool for regulating climate change.78
73(5)(2) ...“sustainable management” means managing the use, development, and protection of natural
and physical resources in a way, or at a rate, which enables people and communities to provide for their
social, economic, and cultural well-being and for their health and safety while —
(a) Sustaining the potential of natural and physical resources (excluding minerals) to meet the
reasonably foreseeable needs of future generations; and
(b) Safeguarding the life-supporting capacity of air, water, soil and ecosystems; and
(c) Avoiding, remedying, or mitigating any adverse effects of activities on the environment.
74 RMA, s6.
75 RMA, s7.
76 RMA, s8.
77 Auckland City Council v John Woolley Trust [2008] NZRMA 260 (HC) at [47].
78Ministry for the Environment "Chapter 5: Responses to atmospheric change" State of New Zealand's
Environment 1997 (Ministry for the Environment, 1997) . See also Climate Change Law and Policy in New Zealand, Alastair Cameron
(ed) (LexisNexis: Wellington, 2011), 127, at 154.
18The RMA was used to regulate GHG emissions in the 1993 “call-in”79 of the Stratford Power
Station application.80 A Board of Inquiry was established to hear an application by the
Electricity Corporation of New Zealand (ECNZ) who wanted to construct and operate a
combined-cycle gas-fired power station. The board recommended imposing a condition
requiring the establishment and maintenance of a carbon sink to offset GHG emissions from
the operation of the plant. Following this decision, the Minister for the Environment weakened
the condition to require ECNZ to instead “take such steps as are necessary and effective to
avoid, or remedy or mitigate the effects of the additional amount of carbon dioxide being
discharged as a result of the exercise of this consent.”81 Despite the weakening of the
condition, its mere existence demonstrates that the government considered the RMA as an
appropriate instrument for climate regulation. The importance of climate change was
emphasised in several cases before the Environment Court in 2002, however, these did not lead
to regulation of the emissions under the RMA.82
IV. THE RESOURCE MANAGEMENT (ENERGY AND CLIMATE CHANGE) AMENDMENT ACT
2004
The Resource Management (Energy and Climate Change) Amendment Act 2004 (“the 2004
Amendment Act” or “the Amendment Act”) added several new sections to the RMA, which
regulate the powers of local authorities in regard to the regulation of GHG emissions. The
purpose of the Act is:
a) to make explicit provision for decision makers under the RMA to have particular regard to
the efficiency of the end use of energy, the effects of climate change, and the benefits to be
derived from the use and development of renewable energy; and
79This was the first application to be the subject of the Minister of the Environment's call-in powers
(RMA, ss140-144A) because of the concern about GHG emissions.
80Board of Inquiry Proposed Taranaki Power Station Air Discharge Effects (Report and
Recommendation of the Board of Inquiry Pursuant to Section 148 of the Resource Management
Act 1991, 1995), at 227–236. Condition 4 begins: “The consent holder shall establish a carbon sink
sufficient to eventually store in perpetuity the equivalent quantity of carbon emitted from the site over
the term of the permit.” The condition goes on to set out details of an implementation plan.
81 Decision
of Hon Simon Upton, Minister for the Environment, Air Discharge Permit Taranaki
Combined Cycle Power Station, 23 March 1995.
82In Environmental Defence Society (Incorporated) v Auckland Regional Council and Contact Energy
[2002] NZRMA 492 (ENC) the Environment Court emphasised the importance and relevance of climate
change and New Zealand’s international commitments under the UNFCCC and the Kyoto Protocol. The
Court however declined to approve the condition sought by the EDS due to “considerable disquiet about
the efficacy, appropriateness and reasonableness of [the] condition as proposed.” In Environmental
Defence Society v Taranaki Regional Council ENC Auckland A184/02, 6 September 2002 the Court
came to a similar decision.
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